Scottsdale Real Estate Update | Monday August 20th, 2018
21 Aug 2018 by Barbara Woyak

Today’s Mortgage Rate Summary

How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning.  Last week the MBS market worsened by -2bps.  This was not enough to move rates higher last week. There was very little mortgage rate volatility last week.
Today’s Rate Forecast: Neutral
Three Things: These are the three things that have the highest ability to impact mortgage rates this week: 1) Trade, 2)Fed and 3) Across the Pond
1) Trade: Top White House officials say they are on the “verge” of crafting a final deal with Mexico but Canada has not been a part of the deal with Mexico. Meanwhile, a contingent from China will be in D.C. this week as part of their “road map” to a meeting between the two Presidents this Fall.
2) Fed: We will get the Minutes from their last FOMC meeting on Wednesday. While they won’t raise rates at that meeting, the policy statement was more “hawkish” than the prior statement and set the table for a rate hike at the next meeting. The Kansas City Fed will host their Annual Jackson Hole Wyoming Symposium, and we will hear from Fed Chair Powell on Friday at that symposium.
3) Across the Pond: Our domestic data will not have an impact on MBS (mortgage rates), and most likely neither will the data from overseas but there are some very key releases which include manufacturing PMI and GDP from several of the top 5 world economies.
Today’s Potential Rate Volatility: Average
Mortgage rates continue to move sideways in a very tight channel. There’s nothing scheduled this week that is likely to push rates higher or lower. The one thing that can drive rates and cause volatility is something unexpected with trade.
Bottom Line:
If you are looking for the risks and benefits of locking your interest rate in today, contact your mortgage professional to discuss it with them.
Barbara Woyak

Frustrated by a bad experience, Barbara began her real estate career with a goal of providing exceptional service. Our motto is "A Name Friends Recommend." If you have a great experience then you will want your friends and family to have that same great experience.